The Bank of Spain estimates that building upwards would allow for the addition of up to 1.2 million homes.

Madrid, Barcelona and 4 other large cities: the key is to densify the land to combat the housing shortage

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The Bank of Spain estimates that a greater densification of the six major urban areas of the country would allow for the addition of between 500,000 and 1.2 million homes to the residential supply. The agency proposes to make more intense use of the land that is still under urban development, where the expected density is lower than that of the already consolidated areas.

The highest estimate corresponds to a theoretical scenario in which the areas in transformation reach the average density of the consolidated urban spaces. In a more moderate assumption, following the gradient of densification observed in those areas, the increase would be around 500,000 homes. The analysis refers to Madrid, Barcelona, Málaga, Valencia, Zaragoza, and Sevilla and does not mean that those houses are currently projected or can be built immediately.

Madrid would concentrate 67% of the additional homes in the scenario of 500,000 units, while Barcelona would contribute another 21%. The Bank of Spain itself presents densification as one of the available alternatives for municipalities facing land scarcity and not as an automatic solution to the housing problem.

The proposal is based on a difference that the supervisor identifies between the already built cities and the new developments. The consolidated areas of Valencia, Zaragoza, and Sevilla present approximately 1.7 times more density than the development areas, while in Barcelona, Madrid, and Málaga the ratio is between two and 2.5 times.

The new neighborhoods are built with lower density

The analysis of the Bank of Spain indicates that the urban planning of the areas that are still in transformation contemplates, on average, a residential density lower than that existing in the consolidated parts of the same urban areas.

The difference is partly explained by the high densification that Spanish cities experienced during the second half of the 20th century. The agency also points out that Spanish urban areas are, in comparative terms, more dispersed than other major European areas and that density decreases more sharply from the centers to the peripheries.

The approach is not solely about increasing the height of buildings. The estimate is based on making more intensive use of the developable land that is already contemplated in the transformation processes, modifying the expected residential density in those areas.

The lack of housing is not explained only by land

The proposal appears in a context in which the Spanish residential supply is reacting slowly to the growth of demand. The 2025 Annual Report of the Bank of Spain indicates that the increase in demand and prices would have led to an expected sustained increase in investment and housing production, but the response of the supply continues to be limited.

Among the obstacles identified by the agency are the scarcity of buildable land, the slowness in the execution of the planned housing, and the difficulties associated with urban planning and management. To these factors are added problems of productivity, business size, and availability of labor in the construction sector.

The construction activity is also not responding at the pace that residential pressure would require. The Bank of Spain indicates that in 2025 about 92,000 homes were completed, 9% less than the previous year, while residential investment remains below the levels recorded during other periods of strong demand growth.

More housing also requires more infrastructure

The Bank of Spain warns that greater densification cannot be approached solely from the number of homes. The growth of urban areas requires planning and financing simultaneously the necessary infrastructure to absorb a larger population.

Public and private transport is one of the elements that the agency considers necessary to strengthen. It also points out the need to expand the provision of public services, including educational and health services, to prevent the increase in residents from generating additional congestion costs.

The capacity to increase residential supply will therefore depend on decisions that correspond to the administrations responsible for urban planning and investment in services and infrastructure. Densification appears in the report as a tool available to use the land already designated for new developments more intensively.

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What is the status of the processing of urban planning plans that allow increasing residential density in large Spanish cities?

In Spain, there is no single “state plan” for densification, but rather a mosaic of regional legal reforms and municipal planning revisions progressing at different speeds. In large cities, the general trend is clear: to facilitate more housing (especially protected and affordable rental) by increasing density and buildability on already urbanized land, while also trying to simplify urban planning procedures. However, the effective deployment is uneven and still faces social resistance, regulatory limits, and administrative bottlenecks.

General trend: more density on existing city

  • Community of Madrid: the new Urgent Measures Law (2026) allows increasing density by up to 30% and buildability by 20% on plots intended for protected housing, even increasing building height by up to two floors without modifying the planning, during a two-year window for licenses and three for works. Additionally, it extends land use changes from tertiary and lodging to protected residential, and lowers parking requirements to one space per dwelling.
  • The same community had already approved in 2024 the law allowing conversion of offices into affordable rental housing, freeing a significant buildable volume without consuming new land.
  • Madrid City Council: is working on a new General Plan model (PGOUM). The Housing Table explicitly addresses redensification, regeneration, and new models such as coliving/cohousing, starting from the fact that developable land is almost exhausted and different possibilities for redensification and regeneration must be analyzed.
  • Barcelona is processing and approving large redensification operations:
    • In the La Maquinista and Prim sector area, modifications to the General Plan have been approved with high-rise blocks (14–18 floors) and very high buildability, concentrating 812 new homes (518 free-market and 294 protected) in one area, and more than 1,600 free-market and 1,700 protected homes in another, according to “Barcelona grows towards the east”.
    • In 2026, the City Council definitively approves the Prim area plan, key to the Pla Viure, aimed at expanding affordable and social housing stock.
    • The council promotes structural measures to increase supply, including strict application of the 30% protected housing reservation in private developments and containment of tourist housing, according to the note “Barcelona promotes structural measures…”.
  • València is adapting its PGOU in specific areas: in the La Torre sector, a punctual modification is being processed and approved to allow multi-level parking (1st and 2nd floors) that do not count towards buildability, which in practice means gaining two floors above ground level, according to 2025 and 2026 City Council notes (initial modification and final step).
  • Málaga uses planning to enable affordable housing on public land and allows greater heights (B+6+attic) on plots intended for affordable rental, as noted in the incorporation of a plot for 300 homes on public land (Málaga City Council).

Status of processing: between mature projects and ongoing reviews

  • In Madrid, the regional densification law is already approved and in force, while the deep revision of the PGOUM is in the technical debate and participation phase (working groups, drafts), not yet in formal approval.
  • In Barcelona, several key pieces have already passed the planning phase (definitive approvals in areas like Prim) and are in the urbanization and subsequent housing promotion phase; others are part of a broader redensification agenda still being deployed, linked to areas such as 22@ or the surroundings of Montjuïc and Sagrera.
  • In other large cities (València, Málaga), densification is mainly articulated through punctual modifications of PGOU or special plans and detailed studies approved by areas, rather than through a large comprehensive revision already completed.

Obstacles and constraints

The consulted documents point to several recurring brakes:

  • Administrative bottlenecks: the Community of Madrid acknowledges that deadlines for sectoral reports blocked developments; therefore, it introduces positive administrative silence if reports are not issued within three months, and removes some in initial phases (Urgent Measures Law).
  • Social conflict and political adjustments: in Madrid, the PGOUM Punctual Modification in Ermita del Santo had to reduce buildability and tower height after receiving around a thousand neighborhood complaints, including criticism of excessive height and density planned (municipal note from 2024).
  • Tensions between densification and other objectives: in Barcelona, strengthening residential supply is accompanied by policies to reduce tourist apartments and contain rental prices, which conditions where and how to densify; the mayor argues that the city can “grow by tens of thousands of homes” but in very specific areas, not generalizing high density.
  • Multilevel coordination: the Madrid case illustrates the need to align regional laws, municipal PGOUM, and state housing programs, and in Barcelona the City Council coordinates its operations with Generalitat and State for financing and protected housing reservations.

Overall, the processing of plans and regulations that allow increasing residential density in large Spanish cities is at an advanced stage in communities like Madrid and in specific areas of Barcelona, while in other capitals it progresses more incrementally. The common vector is to densify the existing city to gain affordable housing, but its practical application remains modulated by local resistance, planning complexity, and the administrative capacity to process changes quickly and with legal certainty.

What are the legal competences of municipalities regarding urban planning and land densification?

In Spain, municipalities have very relevant competences in urban planning, but always within a tiered framework: the Constitution, basic state legislation, regional urban planning legislation, and finally municipal planning. In urban planning and land densification (buildability, heights, intensity of uses), municipalities enjoy a wide margin of decision, although conditioned by those higher levels.

Constitutional and basic legal framework

The Constitution recognizes municipal autonomy (arts. 137 and 140 CE) and reserves to the State, among others, the bases of the legal regime of public administrations and basic legislation on the environment (art. 149.1.18th and 23rd). On this basis, a triple framework is articulated:

  • Law 7/1985, Regulating the Bases of Local Regime (LRBRL), which sets the main municipal competences. Article 25 expressly includes as a municipality's own competence urbanism: planning, management, execution, and urban discipline, as well as the promotion of public protection housing and the conservation and rehabilitation of buildings.
  • State land legislation, currently the Recast Text of the Land and Urban Rehabilitation Law, approved by Royal Legislative Decree 7/2015. This norm establishes the urban regime of property, duties and charges, the concept of buildability and density, and sets basic rules of urban discipline and licenses.
  • Regional urban planning laws, which actually detail urban planning, types of plans, minimum standards (facilities, green areas, maximum densities, etc.) and the specific distribution of competences between autonomous community and municipality.

Municipal competences in urban planning

Within this framework, the municipality generally has the following main competences:

  • General planning: approval of the General Urban Planning Plan (or equivalent figure) and revisions and modifications that, according to regional law, are municipal competences. The municipal plenary initially approves the general planning and the approval that ends the processing at the local level.
  • Development planning: approval of partial plans, special plans, detailed studies, etc. The LRBRL attributes to the mayor the approvals of development planning not reserved for the Plenary, and to the latter the more structural decisions.
  • Urban management: delimitation and execution of action units, land readjustments, urbanization projects, constitution and control of compensation boards or other collaborating urban entities.
  • Urban discipline: granting licenses, controlling the legality of works and uses, stop orders, restoration of legality, sanctions and, if applicable, demolition orders, according to regional and basic state legislation.
  • Municipal ordinances: approval of urban and building ordinances that develop the planning, always respecting basic and regional legislation.

Decision on density, buildability, and heights

The “densification” of land — how much buildability is allowed, how many floors are authorized, what intensity of uses is admitted — is mainly specified in municipal planning. In practical terms, the municipality decides:

  • Classification and qualification of land (urban, developable, non-developable, and their different uses: residential, tertiary, industrial, public facilities, etc.), within the criteria and categories set by regional law.
  • Detailed planning parameters: maximum buildability (m² floor/m² land), occupancy, maximum height, setbacks, alignments, use intensity, minimum plot conditions, etc.
  • Re-densification of already urbanized areas through planning modifications or provision actions, adjusting public facilities when buildability or density increases, according to land legislation.

However, the municipal margin is not absolute. It is limited by:

  • Regional urban planning regulations, which usually set maximum densities and buildabilities, minimum standards for green areas, facilities, reservations for protected housing, etc.
  • Basic state land legislation, which establishes that buildability is a mere planning forecast and only becomes “patrimonialized” when materialized, and links land ownership to specific urban destinations and duties.
  • Supramunicipal interests and sectoral legislation (roads, railways, coasts, waters, historical heritage, environment…), which may impose easements, height limitations, setbacks, or use intensity restrictions.

Inter-administrative coordination and conclusion

In summary, municipalities are the local urban administration and have their own competence to plan municipal territory, manage its development, grant licenses, and exercise urban discipline, including setting densities, buildabilities, and heights. But these decisions must be:

  • In accordance with basic state land and local regime legislation.
  • Adjusted to the detailed urban regulations of the autonomous community.
  • Compatible with supramunicipal and sectoral interests and constraints.

Within these limits, municipal planning and ordinances are the main instruments with which the municipality can guide land densification and the urban model it desires for its municipal area.

What legal and regulatory requirements must be met to modify the density planned in developable lands of urban development areas?

To modify the density planned in developable lands of urban development areas in Spain, an ad hoc agreement is not enough: it is necessary to process a planning modification adjusted to the basic state land legislation and the applicable regional urban planning law, respecting material limits (what can be changed) and procedural requirements (how it must be processed).

1. Basic legal framework

At the state level, Royal Legislative Decree 7/2015, the recast text of the Land and Urban Rehabilitation Law, sets the basic conditions of the land regime and urban and building transformation actions. Among other aspects:

  • It establishes that actions involving greater buildability or density must be accompanied by a readjustment of public facilities (open spaces, facilities, infrastructures) to maintain an adequate proportion between population/buildability and services.
  • It requires that land use be efficient and sustainable, that the urban environment be “sufficiently equipped” and that quality of life be guaranteed, which conditions any density increase.
  • It imposes a regime of equitable distribution of burdens and benefits among owners, so that the advantages derived from an increase in utilization correspond to obligations of cession, urbanization, and, if applicable, relocation.

On this common basis, the autonomous communities develop their own land and territorial planning legislation, which specifies the minimum urban standards (for example, minimum green area surfaces or facilities per inhabitant or per square meter of floor), the degree of detail of structural and detailed planning, and the procedure to modify plans.

2. Material requirements to increase or reduce density

Although details depend on each regional law, a series of common demands are repeated when revising the density planned in a developable sector:

  • Respect for structural planning: if density is part of the structural planning set by the general plan, its modification is usually considered a structural modification, subject to reinforced control (often with regional intervention).
  • Maintenance or improvement of facility standards: density increase cannot produce a deficit of green areas, facilities, or infrastructures. In fact, actions that increase buildability or density are conceived precisely as “provision actions” when they add public land to readjust that proportion.
  • Technical and territorial justification: the modification report must motivate the need for the change (housing demand, adjustment to urban regeneration strategies, better use of existing infrastructures, etc.) and demonstrate its compatibility with the current territorial and urban model.
  • Environmental and risk assessment: density change impacts mobility, consumption, emissions, noise, or flood risk, so it usually requires strategic environmental assessment and specific analysis of infrastructures and services.
  • Equitable distribution and owners’ rights: already consolidated rights must be respected and, if the modification significantly alters utilization among plots, mechanisms for balanced sharing of benefits and burdens (new cessions, additional urbanization costs, etc.) must be foreseen.

3. Usual procedural requirements

Density modification is normally articulated through a punctual modification of the general plan and/or development plans (partial plan, sectorization plan, equivalent urban development plan), following a process that, with regional nuances, usually includes:

  • Initiative: may come from the municipality itself or from promoters/owners under conditions set by regional law.
  • Drafting of a plan modification document, with a justification report, modified regulations, comparative maps, economic-financial study, and proposal of new facilities and density parameters.
  • Strategic environmental assessment, ordinary or simplified depending on the scope of the modification, incorporating environmental constraints into the final plan content.
  • Public information for a minimum period (set by regional regulation), with the possibility of submitting allegations by affected individuals and entities.
  • Mandatory sectoral reports (roads, waters, coasts, cultural heritage, environment, etc.), which may condition or limit the density increase.
  • Initial approval by the municipal plenary, document review in light of reports and allegations, and, if applicable, provisional approval.
  • Definitive approval:
    • In some cases, by the municipality itself (detailed modifications).
    • In others, by the competent regional body, especially if structural elements are affected or basic standards are modified.
  • Official publication in the corresponding bulletin and, subsequently, registration in planning records; effectiveness against third parties arises with that publication.

4. Practical conclusion

In summary, to modify density in developable lands, a simple agreement between promoter and municipality is not enough: it is essential to process a formal planning modification, subject to environmental assessment, public information, sectoral reports, and municipal (and in many cases regional) control, always guaranteeing facility standards, sustainability of the urban model, and equitable distribution of burdens and benefits among affected owners.

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